Respecting the environment isn’t just good for our planet, it’s good for business

In Canada, summer will soon be upon us. As temperatures rise, over 55% of households across Canada will turn on their air conditioners.

Between 1928 and 2010, the most common coolant in our air conditioners and fridges was Freon, a refrigerant comprised of chlorine, fluorine and carbon – or chlorofluorocarbon (CFC). Although Freon was most commonly used in refrigeration, it was also widely used in aerosol-spray containers. Due to its negative impact on the earth's ozone layer, the Canadian government began to phase it out in 2010.

The Hole in the Sky

The Ozone Layer is part of the atmosphere that protects earth from harmful, carcinogenic ultraviolet (UV) radiation from the sun. However, because of human activity and pollution related to CFCs, ozone molecules are broken by chlorine atoms from CFC molecules resulting in a “hole” forming in the Ozone Layer.

Although Freon has played an integral role in the depletion of earth’s ozone layer, the majority of the public is unaware of the long-term impact this gas has had on our climate.

The Global Response

In order to mitigate further ozone depletion 197 countries adopted the Montreal Protocol on Substances that Deplete the Ozone Layer in 1987. The goal of the Montreal Protocol is to protect the Ozone Layer by phasing out the use of nearly 100 ozone-destructive chemicals; this includes CFCs.

The protocol was written to include an adjustment provision that would allow countries to revise the treaty to reflect new scientific information [1].

For example, hydrofluorocarbons (HFCs) which were originally used as alternatives to CFCs are now being phased because of their contribution to climate change. The protocol also included a special provision to reflect the needs of developing countries, allowing certain countries to temporarily delay their CFC reductions to meet domestic needs.

If countries take immediate steps to reduce their CFC emissions and implement alternatives to ozone pollutants, NASA argues that ozone levels could return to 1980 baseline levels by the end of the 21st century [2]. The current recovery of the ozone layer is widely viewed to have occurred because of countries’ commitment to the Montreal Protocol.

Many have regarded the Montreal Protocol as an emblematic international treaty. Former UN Secretary General Kofi Annan said that the protocol is, “Perhaps the single most successful international agreement to date” [3]. The success of the Montreal Protocol is significant. It demonstrates that world leaders recognize the negative impact humans can have on the environment and that it takes ownership and responsibility to take actionable steps to remediate impacts.

The Local Response: ABA Cooltrans

Companies around the world are committed to following the Montreal Protocol. As a member of the Montreal Protocol, Vietnam is working to phase out Freon. One such company is ABA Cooltrans, a leading integrated cold chain service provider in Vietnam. ABA Cooltrans transports and stores refrigerated goods across Vietnam.

In October 2016, ABA received a $120,000 CAD grant – managed by MEDA – from Canada to convert its old cold storage facility from Freon to ammonia gas. This grant was one of 31 Sustainability Innovation Grants (SIGs) and aligned with the Environmental, Social and Governance (ESG) outcomes of MEDA’s Impact Investing in Frontier Markets (INFRONT) project.

ABA’s old refrigeration system relied on Freon as a coolant for their air conditioning units and freezers. While Vietnam has a national plan to phase out CFC and other ozone depleting compounds, ABA decided to begin their phaseout sooner than required. The collaborative effort was successful in converting ABA’s Freon system to ammonia, making ABA the largest 100% ammonia gas cold chain storage facility in northern Vietnam.

The conversion from Freon to ammonium is not only good for the environment, but it was also beneficial for ABA’s bottom line.

The new system improved productivity because it allowed floor managers to monitor storage temperatures with their phones.

It improved the work environment because the ammonia system was quieter than the Freon system.

The conversion also shed light on refrigeration leakage issues which was decreasing ABA’s productivity. ABA addressed this by installing air tight locks and developing a new inventory system that optimized space in each fridge. The retrofitting and re-organization led to a decrease in maintenance cost of $2,025 CAD per month [4].

“We now understand the impact of the environment and think about how water and electricity impacts the environment. Overall, the company’s awareness has increased.” Thao Truong, SIG Manager

MEDA strives to be environmentally responsible in our activities. We have developed a framework comprised of four key areas (image below) of environmental sustainability and climate resiliency that we believe are critical to protecting our environment and entrepreneurs from the impacts of climate change. This project highlights MEDA’s commitment to our environmental mandate, specifically green growth. Through our management of ABA’s grant, we were able to help them transition into becoming a greener and more profitable company.

In order to heal earth’s ozone layer, the public and private sector must come together. The Montreal Protocol is the first step in the right direction. Private businesses like ABA are important, because they set an example to those around them. With their actions, they are declaring that the environment is important and should be respected by changing their behavior. Respecting the environment isn’t just good for our planet, it’s also good for business.